I have the exact same issue with my iphone 4s. I either have all bars or no bars. Even with full bars, the phone will not make or receive calls or texts, but can receive emails- spotty though. I am usually showing the circle but will also show 3G with no difference at all in service. Verizon has already sent me a new iPhone to no avail. The problem resolved itself for about 5 days (after being broken for 2 weeks!) but then suddenly stopped working yesterday. I am having this problem in several cities so I know it is not my house or local coverage. Have tried reprogramming (will not connect to call), resetting, setting up as new phone, etc...
We have opened 3-4 tickets and no one can tell me why my line is having the problem. My wife's 4s works completely fine even sitting right next to it!
Please let me know if anyone else is having this problem and how you solved it!!!